A politician has expressed concern that businesses are suffering significant setbacks due to increased taxes on second homes.
Conservative representative Mark Isherwood has revealed that some businesses are being forced to shut down following the granting of council powers to impose premiums of up to 300% on second homes and holiday rentals.
Conwy Council is set to decide this Thursday whether to raise its council tax premium to 100%. The Welsh government has defended these premiums, arguing that they are designed to promote a more equitable housing market. New legislation now permits local authorities to levy these premiums on top of standard council tax rates, with a cap set at 300%.
This legislative change, a result of a cooperation agreement between the Labour and Plaid Cymru parties, aims to make it more affordable for individuals to purchase homes in their hometowns. Additionally, the regulations surrounding self-catering accommodations being subject to business rates, rather than council tax, have been made more stringent, requiring properties to be rented for at least 182 days to qualify.
Mr. Isherwood, who represents North Wales in the Senedd, pointed out that many property owners are struggling to meet this new 182-day threshold (previously 70 days), rendering them liable for higher premiums.
He revealed that he has been in contact with numerous constituents who run legitimate self-catering enterprises, including a couple who have decided to sell their entire property since their holiday rental is attached to their primary residence.
“They’re heartbroken. They talk about mental health issues, sleeplessness, financial consequences,” he said.
He added: “We’re talking about real, indigenous businesses that are central to local tourism economies, potentially having their hearts ripped out of them.”
He mentioned that a number of individuals were encountering difficulties when attempting to sell their properties due to concerns from mortgage lenders regarding the effects of these premiums on specific properties. Denbighshire council recently passed a decision to raise the premium on second homes and properties left vacant for extended periods from 50% to 100%.
The Welsh government said: “Tourism makes an important contribution to the Welsh economy and to Welsh life.
“We do, though, need to ensure appropriate balance.
“We believe that everybody has a right to a decent, affordable home to buy or to rent in their own communities so they can live and work locally.
“The changes to the local tax rules for self-catering accommodation and second homes are designed to help develop a fairer housing market and ensure property owners make a fair contribution to the communities where they own homes or run businesses.”
